Thursday, September 18, 2008

"Those That Don't Learn From History"

"Are Bound to repeat it." I don't remember whose famous quote that was, it is more widely ignored than any I know of.

"Following a ten year bull market, loose interest rates and borrowing standards, the stock market plunged amidst bank and investment house failures." 2008? Not even. That was 1929. If it sounds familiar, it is.

This condition is close to being a current event, rather than history. The things that brought Wall Street down back then was primarily a highly speculative market, in which investors borrowed to the hilt to purchase stock that was going Up ... Up... Up. When the market slipped and the banks called in margin accounts, those without means, defaulted on those loans by the thousands, causing over a period of three years, a cumulative failure of the entire economy.

Everyone has heard the term "1929 crash," but the real depth of the depression was 1932. It didn't all happen at once, and if it indeed happens again, it will also be a slow crumbling of our financial infrastructure. We didn't start recovering from the '29 crash until the industrialization leading up to World War 11.To date, in 2008, eleven banks have already failed. Washington Mutual, the country's largest savings & Loan, is teetering on the brink and will probably either fail in the next week or be bought out. All but two of the leading investment houses are either bankrupt or bought out by banks that may find themselves in the same boat.According to Taipan Publishing Group, there are currently 117 banks on the FDIC watch list. Already, the Federal Deposit Insurance Corporation (FDIC) is strained from insuring deposits from those eleven banks with many more to come.

Many people are not aware that many savings plans, money market accounts, CD's 401k's and all stock and mutual fund accounts are uninsured. Most investors have never faced a total melt-down of this country's economy. I attribute some of this to the lack of productivity we have experienced since free trade was established as our policy. Your uninsured deposits have already been loaned out to people borrowing too much on too little collateral that are in foreclosure. When/If your bank shuts it's doors, your money is gone.

Many, if not most banks are shutting the loan spigot off, attempting to get heavy in cash, which is going to cause the auto industry to crash, as the over building of real estate already has crushed that industry. If oil comes back down to around $65 or $70 per barrel, that will help. The closing of our national forests to logging, even selectively, and the curtailing of mining and heavy industry can be laid at the feet of extreme environmentalists that don't believe or don't care, that for every action there is an equal and opposite reaction.

People, we are feeling that reaction now. Prior to 1929 we had a very strong industrial base that when reactivated, produced the war materials that supported England in 1939. We do not have that base anymore. It's all offshore. If we were to try to ramp up our military in a war situation, without our allies that are producing much of our steel, aircraft parts and on & on, we can't even defend ourselves. We have sold our collective souls to save a buck and it's going to bite us on the ass.

1 comment:

Anonymous said...

Idaho Department of Lands
2550 Hwy 2 West
Sandpoint, ID 83864

Re: Privatization of Marinas October 3, 2008

To all whom this concerns,

The great state of Idaho and its people have entrusted our precious and limited open water resources to the Idaho Department of Lands. Certainly I and others will keep a keen eye on you to follow every legal procedure required to assure that this trust is earned and maintained. As you navigate the process to allow a few private citizens to garner huge profits from a public resource, know this: When the condo owners begin to gouge the public users to pay for their private facilities you will be held personally accountable to the people. As the privatized marinas begin to exclude children or the general public from access in general, you will have to answer to the people.

Throughout the public hearing process, the careful examination of all laws and regulations, and the final ruling as to whether or not the state has the right to allow a few business people to increase scarcity (i.e. price) of a limited resource, know that the public in general will assemble and hold those in government accountable for giving away a resource that is not theirs to give. The people of Idaho own the lakes. How can you allow the sale of something you don’t own? How can you allow individuals to sell something that they don’t own? Please don’t hide behind the thinly veiled legal scheme of selling shares of land that goes with the marina lease and pretending that it doesn’t represent a share of the footprint of the lake that the marina owner has no right to sell. It is embarrassing when public officials behave as though the public is that dumb.

Through class action I am sure that the actual outcome of this process will assure accountability of government officials directly to the people.